I was on the point of beginning Alan Rugman's attractive book, The End of Globalization , when I received a draft of an article from Rudiger Dornbusch of the Massachusetts Institute of Technology, titled "Globalisation: not a choice". So I read the book and Rudi's article in parallel. It was a salutary experience to see how two major academics, starting from very similar data, could agree on many aspects of globalisation and then dramatically disagree on fundamental hypotheses.
Rugman is a fellow in strategic management at Templeton College, Oxford. He has been a visiting professor at Harvard University, the London Business School, the University of Southern California, the Columbia Business School and the Sorbonne and has consulted for major private and public companies. In other words, we are talking about a heavyweight.
His book reads easily. It is thick with statistics, tables and an astonishing, in-depth knowledge of international trade and foreign economic affairs, including the history, current policies and even inner politics of the bureaucracies concerned with trade and foreign direct investment (FDI). I learned a lot, particularly about the negotiations leading to the establishment of the North American Free Trade Agreement, as well as about the process for redress in international disputes.
Rugman succeeded not only in educating me, but also in worrying me - at a time when we clearly have plenty to worry about in international relations. The possibility or, worse, the likelihood of some branch of the United States government impulsively picking up its marbles and not wishing to play any more with the other children emerges much more strongly from this book than from the daily or monthly financial press. Such a dangerous scenario fills me with fear and horror.
Rugman does not believe that globalisation has ever been achieved in the real world. He bases this largely on statistics taken from production and manufacturing, ie the supply side of the world economy. But it would be wrong to tag him simply as a man of the "old economy". He does consider the internet, indeed a sub-chapter of his concluding chapter is titled "The Internet is global, but the users are local".
His world is instead one of regional blocs, triads, and his concern is what strategies should be pursued by economic actors such as multinational companies (MNCs) or local and regional companies once they have learned that global strategies are probably a waste of time. The most interesting parts of the book are about non-governmental organisations and their interaction with governments and MNCs.
While I do not - I cannot - contest Rugman's facts and figures, the regional structure of automobile production is not the greatest of my preoccupations. I am much more concerned with the global power of brands, whether in products, services or ideas; and with the demand side of the economy and the impact of the internet on it. So are most of the people I interact with on a daily basis.
In addition, Rugman seems to enjoy creating dialectical opponents and then cutting them down to size with the power of statistics. Nothing wrong with that in principle, except that all his targets, while apparently writing against globalisation in the 1990s, espouse the view current in the 1960s or at best the 1970s: that MNCs are evil. It might have been worth bothering to refute these people and their arguments if they really had been the brainpower behind the demonstrations in Seattle, Davos, Prague and Genoa. In fact, I doubt that even French anti-globalisation activist Jove Bove knows their names.
For a man with such a vast command of information and detail, Rugman surprisingly presents in the main text tables that are not always very relevant or where the data displayed is not well characterised. This may be due to his excessive familiarity with the subject or to somebody else's editing, but it does make the attentive reader slow down and become unnecessarily sceptical. In one chapter (on politics, healthcare and ethics), there is even the typical consultant's quadrant used to explain the author's framework for "analysis of globalisation and sovereignty". As a past buyer of consultancy services, I used always to freeze when a consultant produced a quadrant to impress or patronise the audience. The trick is unappealing in an otherwise rich and well-documented academic book.
Despite these criticisms, I would urge academics, trade and FDI experts, the staff of the World Trade Organisation, the World Bank and the International Monetary Fund, and corporate chieftains, chief financial officers and strategists, particularly those in consultancy firms, to read the book avidly and make up their own mind about globalisation. In particular, I recommend it to my esteemed friend Rudi at MIT: perhaps he should write a book and join the discourse.
Rudi Bogni was formerly CEO, private banking, at UBS Ag, the largest Swiss financial services group.
The End of Globalization
Author - Alan Rugman
ISBN - 07126 8495
Publisher - Random House
Price - £15.99
Pages - 237